Court order blocking overtime changes affects U-M implementation

Court order blocking overtime changes affects U-M implementation

(Editor's note: This story was updated Dec. 7 with additional information about U-M's actions related to this issue.)

With the legal outcome of new federal regulations governing overtime eligibility currently in question, the University of Michigan will pause implementation of related changes that had been scheduled to take effect Dec. 1.

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On Nov. 22, a U.S. District Court judge in Texas issued a nationwide injunction to postpone the implementation of changes to overtime eligibility under the Fair Labor Standards Act. The changes would have raised the salary threshold for an individual to be considered a salaried — or exempt — employee to $47,476.

Exempt employees do not qualify for overtime pay, while non-exempt employees do. About 2,400 faculty and staff at U-M would be affected by the changes.

To comply with the regulations, units either had planned to raise salaries to the new threshold to maintain FLSA exempt status, or re-classify individuals under the threshold to FLSA non-exempt, making them eligible for overtime.

At this time, the university will continue to pause implementation of changes to employee FLSA status. Individuals who initially were transitioned to FLSA non-exempt status under the anticipated new regulations were returned to exempt status as of Dec. 1 and will remain so until the situation is resolved.

The university will not mandate institutionwide salary increases that would have been required under the revised regulation.

The National Institutes of Health has announced it is proceeding with its planned increase in postdoctoral stipends. Many university units use that benchmark as guidance for postdoc pay.

During the analysis that the university conducted as part of this process for all staff, units identified issues related to equity or competitive pay for some individuals. As always, units have the flexibility to address those situations. Units will communicate with affected individuals through their University Human Resources contacts.

Comments

Camron Amin

on 11/30/16 at 7:37 am

The university should implement the new policy if it would benefit the 2400 employees affected. It should not take a law to compel us to do the best we can by our employees. If the absence of the new law makes it financially more difficult to achieve the goals of the new policy then we should come as close as we can. It is likely that more regressive, anti-labor policies will be what is on offer from the state and federal government for the next few years. UM should not act like a greedy corporation and take full advantage of every pro-business policy at the expense of professionals who have lower salaries.

Alpay Seven

on 11/30/16 at 9:01 am

It is very unfortunate to see UofM acts like a company take advantage of the every loophole to pay its employees less. There is a tramendous financial burden on postdocs especially the one with kids. I was hopefull with this change about the quaility of postdocs would improve incrementally. However, UofM unfortunately found a last minute excuse halt these hopes.

Joe Guy

on 11/30/16 at 9:18 am

This is outrageous. I encourage everyone at the University to organize and protest this decision. We also have a say in this.

sharon jones

on 11/30/16 at 10:13 am

Not everyone "benefits" from this! It actually decreases my pay by $250 per month, like a new car I can never have. This is not a benefit. I would protest being moved from Exempt to non exempt. It only benefits the ones who are underpaid of the $47,000. They do not pay overtime over that amount, so it does not matter how many hours you work.

Adam Boisvert

on 12/02/16 at 10:59 am

My understanding is that the main difference between exempt and non-exempt is that if you're non-exempt, they have to pay overtime (if you work overtime). Which should be better, or at least break even, for people.

Does it have something to do with salaried vs hourly pay? Like you work less than 40 hours a week? Or did the university make changes other than the overtime switch?

Amanda Weber

on 11/30/16 at 10:27 am

This is absolutely the right thing to do. The FSLA law is horrible and does not help anyone. My monthly pay is dropped almost $300 per month because of this law. I hope the University actually does something right and correct it. Change the people that were Exempt back to Exempt. They are messing with people lives and they don't care. I am so glad the federal government stepped in, now let's hope the University sees how wrong they were in making the changes they did and correct their mistake.

I encourage everyone at the University to organize and let the University know they need to put everything back to the way it was. They need to protest the FSLA law! It is outrageous!!!

Shannon Jones

on 11/30/16 at 1:16 pm

It actually does help a lot of people, like those individuals who work 10-20 hours of overtime per week and are still making barely enough to get by. This change was going to allow my husband and I to move closer to his work to accommodate his long hours, and now we will not be able to. I am trying to understand both sides, and I implore you to do the same.

Shannon Ignorant

on 12/06/16 at 9:30 am

Mrs. Jones, before you make comments that mislead informed people rightfully pointing out that our employer continually makes greedy business decisions, please make certain you understand the facts. There is no circumstance that would cause this change in policy to hinder an employee. Your statement that you would "lose" $250 in compensation is completely inaccurate.

Adam Boisvert

on 12/02/16 at 11:08 am

As I said above, I'm trying to understand how people are losing money with the switch to "nonexempt" status: it seems to me like it should be better -- now you can get paid for overtime. If you don't work overtime, you should at least break even.

Is that not how the university handles it?

The federal government made the FLSA in the first place, saying that some people had to get paid overtime when they worked overtime, but made exemptions for "white collar" workers making a certain amount. This change (that the judge postponed) just raised the amount needed for the exemption, so more people were covered by the act. All else being equal, being covered by the act seems like a good thing for an employee.

Amanda Weber

on 12/05/16 at 11:54 am

I am not allowed to claim overtime. First, I don't have overtime to claim and how we are losing money is we will receive 26 paychecks per year as opposed to 12. The difference being we get 2 extra checks twice a year. My check goes down almost $300 per month, but doesn't get made up until their are 5 Fridays in a month.

Now the University if breaking federal law, by not moving all the positions back to the exempt status as the federal court mandated.

Jane Smith

on 11/30/16 at 10:30 am

I agree with Sharon. Many of us were slated to change from exempt to non-exempt, which was awful. We were being demoted just because of our job title. We are doing the same work, with less benefits. Even the university's transition plan was horrendous. The time frame to repay the advance was way too short. They did not consult any of the people that this change was impacting before implementation and the result is 2400 unhappy employees. To address those getting a raise to comply with this regulation just to have it be taken away from you, I agree that is equally deplorable. Your raises should stand.

Adam Boisvert

on 12/02/16 at 11:19 am

What benefits are/were effected by the change?

Marisa Gies

on 12/02/16 at 4:55 pm

For some employees, especially those who don't work over 40 hours a week generally but who were already exempt from overtime (which means they were paid monthly), being moved down to non-exempt status is a downgrade. Exempt employees, paid monthly, accrue 2 vacation days a month instead of 1.

It's a complicated situation, for sure, with pluses and minuses on both sides. I really feel for the research fellows and other staff who expected substantial raises on Dec 1, as the university had already announced the implementation of the policy.

Jane Smith

on 11/30/16 at 10:40 am

If anyone comes up with a mechanism to peacefully organize and protest the FLSA issues occurring at UM, please post here with the details so we can join in!

Linda Stegmeyer

on 11/30/16 at 11:18 am

Since the University only has 2400 employees who were affected, those employees should be grandfathered to exempt status. When and if the law goes into effect, make the non-exempt status effective on those job titles/positions so that only new employees are affected.

Amanda Weber

on 11/30/16 at 12:34 pm

I completely agree with you. It is absolutely ridiculous this is happening to our pay. They grandfathered in the vacation benefits, they should be able to do it for the salary as well. They have no concern or care for the length of time you have been employeed or the type of employee you are. I really hope they choose to follow the federal law.

Adam Boisvert

on 12/02/16 at 11:12 am

Why should older employee be punished by being exempt from the labor law (and not getting overtime pay when it's learned). Are there other benefits to being "exempt" that I don't understand? I know that vacation time is calculated differently (better for exempt employees) but I think that was grandfathered in.

Sharon Jones

on 12/05/16 at 9:42 am

Because the exempt employees get paid once a month, when you split that up to biweekly at 52 weeks in a year, they have to take money out essentially to cover the months where there are more pay periods, So it really is not a benefit, esp when we can't get OT anyhow. Yes this is a benefit for many but not for all. Also UM reverted everyone back but a couple of titles, which is completely wrong. If they are going to follow the government rules for some, then they need to follow it for everyone. But at this time HR has not made a final decision on a few titles affected. So not cool.

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